Promoting A Regional Energy Market in Central America
Title: Renewable energies and energy efficiency in Central America (4E III)
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Costa Rica, Guatemala, Honduras, Nicaragua, Panama, El Salvador
Lead executing agency: Secretaría General del Sistema de la Integración (SG-SICA)
Overall term: 2010 to 2021
The Central American countries of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama have embarked on their own journey towards 'energy transition' in recent years. Their aim is to reduce their dependence on fossil energy sources, which so far still cover one third of their current energy needs. Ensuring a climate-smart, independent, cost-effective and reliable energy supply is particularly important for the region. Together with the other member states of the Central American Integration System (Sistema de la Integración Centroamericana, SICA), their goal is to expand renewable energies and improve energy efficiency in the context of the 'Central American Sustainable Energy Strategy'.
Central America has made progress in implementing renewable energy projects in recent years. The share of wind and solar power in regional power generation rose from 1.1 to 8 per cent between 2009 and 2017. However, there is still no active comprehensive regional strategy for increasing energy efficiency through the implementation of successful pilot projects on a larger scale. The increasing feed-in of variable renewable energy (e.g. wind or solar power) presents grid operators and regulators with new challenges in terms of grid integration and stability.
Energy efficiency and the integration of variable renewable energy into the regional electricity system in Central America have improved.
The regional project on Renewable Energies and Energy Efficiency (4E) in Central America is now in its third implementation phase. The project has supported the implementation of 4E measures in Central America since 2010. The current Phase III aims to improve the energy efficiency of selected technologies and the grid integration of variable renewable energy in Central America.
The objective will be achieved by further expanding energy efficiency measures and integrating variable renewable energies into the electricity system.
- A regional process is initiated in Central America in order to further expand energy efficiency initiatives. Experience gained in energy usage areas are to be shared at regional level. At the same time, energy consumption for cooling, air conditioning and lighting is being reduced through dedicated measures.
- The project is cooperating both with the regulator and the network operators of Central America’s energy system to promote grid integration. Joint proposals for standards and instruments that can be used at regional level are to be developed to improve feed-in and thus contribute to the stability of the regional electricity system.
- The regional project is also working on the further development of academic and vocational education and training with a special focus on digitisation in the energy sector.
- Energy efficiency measures for Central America: Energy consumption has already been reduced. As part of this work, the project has introduced energy-saving, eco-friendly air-conditioning systems with natural refrigerants as well as efficient lighting and cooling systems in the region.
- Grid stability for the regional electricity market: The regional operating authority has developed grid studies and instruments for the regional electricity system together with national grid operators and international experts to adapt the design and operating processes of the grid to the increasing share of variable renewable energies.
- Digitisation of the energy sector in Central America: The project initiated a process to promote digitisation in the energy sector in 2018. Following an introductory workshop and further training on digital solutions in Germany, a digital road map was developed for energy companies in Central America together with the relevant stakeholders from the regional energy market.
- Women working in the energy sector: The project supports the promotion of gender activities for careers in the energy sector. In May 2018, a women’s network for Central America's energy sector was established. Several workshops, as well as mentoring and training programmes, including with the Global Women's Network for the Energy Transition (GWNET), were implemented.